Historical Narrative on $2 Bill

The Departmen ofthe TREASURY WWE N@

November 3, 1975

HISTORICAL NARRATIVE

ON THE $2 BILL

WS-445

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The $2 denomination enjoys a rich tradition in American
history. The $2 bill originated on June 25, 1776, when the
Continental Congress authorized issuance of $2 denominations
in "bills of credit for the defense of America." Under this
authority, 49,000 bills of $2 denomination were issued.

During the Civil War, a July 11, 1862, Act of Congress
permitted the $2 denomination as U.S. Currency, and it re-
appeared in subsequent years as over-size U.S. Notes, Silver
Certificates, Treasury notes and National Currency using a
number of different portraits, including Alexander Hamilton,
James B. McPherson, Winfield S. Hancock, William Windom, and
George Washington.

In 1928, the more familiar size $2 U.S. Note with the
portrait of Thomas Jefferson, third U.S. President and author
of The Declaration of Independence, was issued.

The most recent printing of the $2 denomination was the
1963-1963A series of U.S. notes last printed in May 1965 and
officially discontinued by the Treasury Department on August 10,
1966. At that time, low levels of public demand were cited as
the primary reason for discontinuance. These low circulation
levels have subsequently been attributed to the low production
levels of the bill, which was printed solely to help meet
statuatory requirements for approximately $320 million of U.S.
Notes. The total volume of the $2 bill was $139,321,994 on
June 30, 1966, or approximately one-third of one percent of
total outstanding currency; these low production levels helped
create an image of scarcity to the general public. The general
unavailability of the bills combined with historical super-
Stitions, resulted in increased Government costs of handling,
printing, distributing and destroying these "oddities."

The 1963 Series A note, which was most popular in New
England and some western states, bore Jefferson on its face
and Monticello on the reverse. It was a U.S. Note and bore
the signatures of then Secretary of the Treasury Henry Fowler
and Treasurer of the United States Kathryn 0. Granahan.

Since 1966, and particularly in the past eighteen months,
there has been increasing interest in a $2 note as expressed
by Congress, the American Revolution Bicentennial Administration
(ARBA), the general press, the public, the Federal Reserve System
and collectors. Various bills have been introduced in Congress,
usually calling for a specific design or commemorative issue.
On September 30, 1970, ARBA unanimously proposed reissuance of
a $2 note with a Bicentennial design (Ref. Transcript of Pro-
ceeding, Advisory Panel on Coins and Medals, p. 232, 9/30/70).
The Director of the Bureau of Engraving and Printing, responsible

for the printing of all U.S. currency, first proposed reissuance

of the $2 note in 1969 to achieve cost savings through a P
reduction in the printing volume for ¢1 bills. Mee one ecuey

groups and task forces composed of members from the [Ireasu a
Department, Federal Reserve System and Bureau of Engraving oo
Printing have studied the $2 note situation. In December, 19 .

the Federal Reserve commissioned a study by a group of Harvar
Business School graduate students to evaluate the marketing ©
feasibility of reissuing the ¢2 bill. This study, completed in

May 1975, found no latent public demand for the $2 denomination,
but did find that if reissued in substantial quantity the public
would use the note. The study also noted that public "'supersti-
tions" and misconceptions could be easily overcome. Retailers

and bankers indicated support for the note if it 1s issued in ve
sufficient quantity to meet demand, if it 15 demanded by the public
and if it is issued as a permanent part of the circulating currency
(Copies of the Harvard study Executive Summary available upon
request to Mr. Steven Sarle, Department of the Treasury, Main
Treasury Building, Office of Public Affairs, Washington, D.C.,
20220, telephone (202)964-2042).

Based on the results of these various reports and increased
public interest, the Secretary of the Treasury believes it to be
in the best interest of the American public and economy to reissue
the $2 bill. The average annual requirement for $1 notes is 1.7
billion pieces of currency or 55-60 percent of all currency re-
quirements. By supplanting one-half the face value of the annual
requirement for $1 notes with $2 notes, the Treasury can save
substantial manufacturing costs. The amount to be saved is
estimated to be $35 million over the next five years (FY 1976
through FY 1981) or $27 million in 1976 dollar-terms. Savings to
the Bureau of Engraving and Printing and the Federal Reserve
System will result from reduction in sorting, printing, main-
tenance, storage, custody, shipping, destruction and improved
Space utilization at the Bureau.

A Bicentennial design was selected to help maximize public
acceptance and interest, though the new note is not simply a
commemorative issue. The Treasury plans to issue 400 million notes
per year to assure sufficient volume as a circulating medium and
intends that the $2 note become a permanent part of our currency.
At these levels of production the $2 note will provide great
convenience to the American people by accommodating the decreased
purchasing power of $1 bills due to worldwide inflation since
1966 and allowing the public to carry fewer $1 bills. It is the
Treasury's hope that these consumer conveniences, combined with
potential cost savings and the appealing design of the new note,
will assure its acceptance by the public.

The new note will be produced from a steel intaglio engraving
similar to all other denominations of U.S. currency. The face
measures 2.360" x 5.90" on the master die, and the back 2.18" x5.61"
on the back master die. Printing will be accomplished from 32 sub-
ject plates, using the same green and black inks as used on all

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other currency. The face design, featuring a portrait of
Thomas Jefferson painted in the early 1800's by Gilbert Stuart,
incorporates the principal features of the previous $2 U.S.
note, with a change in designation to Federal Reserve Note.

A Federal Reserve Bank seal will supplant the numeral "2" on
the left, and Federal Reserve Bank identification numbers will
be added. As required by law the note will bear the signatures
of William E. Simon, Secretary of the Treasury, and Francine I.
ee Treasurer of the United States. The Series date will be

The back design of the $2 bill is completely new. The
vignette is surrounded by a geometric lathe border with the
ribbon title and denominations in bank note Roman lettering.

The words "In God We Trust" appear at the bottom center in
Gothic lettering, and the title 'Declaration of Independence
1776" is in Roman lettering in the center of the lower border.
The engraved vignette on the back of the $2 note is based on the
painting, "The Signing of the Declaration of Independence" by
John Trumbull. The vignette on the $2 note differs from the
original painting in that production, security and aesthetic
considerations required dropping six figures from the rendition;
the six appeared on the extreme left and right hand borders. The
original work was done by Trumbull during the post-Revolutionary War
period. He later was commissioned to reproduce the painting in
the Capitol Rotunda in Washington, D.C. The only perceptible
difference between the painting and the mural is that in the
painting the foreground figures appear to be seated on a wooden
platform, while in the mural the platform appears to be covered
by a rug. The original painting is now in the Trumbull Gallery,
Yale University.

The Secretary of the Treasury has authority to determine
denomination and design of all currency. The $2 note does not
require legislation since it already is authorized as a Federal
Reserve Note or U.S. Note by the Federal Reserve Act of 1913.
Federal Reserve concurrence has been received since they actually
distribute all currency. Numerous questions have been raised
relative to changing the color, size or shape of the $2 note. The
continuing monochromatic, single color face and single color back
design of United States currency in all denominations is based on
established technical judgment of the optimal counterfeit deterrent
values in this technique. Similarly, the uniform size of all
denominations of U.S. currency contributes to its security in re-
quiring users to inspect the bill before use to determine denomi-
nation.

It is critical that the public understand their wide accept-
ance and use of the new note will save the government money and
that the new note will be produced in ample quantity so as to
eliminate the previous problems of scarcity. The Harvard study
indicated that today's educated public will not be deterred by the
colorful superstitions of folklore regarding the $2 bill; if any-

thing, they add to the mystique and charm of this bill.

Bankers and retailers have indicated varying degrees of
concern over potential teller confusion, change-making errors,
forms changes and the need for minor retraining of personnel.
However, they have all indicated they could easily accommodate
a new $2 note given sufficient lead time (usually 3-4 months),

a substantial volume of bills produced and wide public acceptance.
Major business machine manufacturers anticipate no problems in
accommodating the new note with existing equipment, Canadian
merchants, who use the same cash register equipment as 1S used in
the U.S., have no problems in accomodating the $2 bill.

Production plans call for the Bureau of Engraving and Print-
ing to commence printing in February and have 225,000,000 $2 notes
available for issue by Thomas Jefferson's birthday (April 13, 1976)
and a yearly order of 400,000,000 notes available before July 4,
1976. This production schedule of 11 million notes per day will
assure availability at each of the Federal Reserves 39 distri-
bution points in time for public release on the date of issue.

The Treasury is planning a broad public introduction aimed
at informing all Americans of the benefits and permanence of the
new $2 note. Major trade, professional and consumer association/
organizations are being asked to actively support the reissuance
in the public interest and to help educate their constituencies.

The public is the key factor in the circulation of coin and
currency. Banks order specific denominations and block of currency
from the Federal Reserve to meet their business and individual
customers’ needs. When a coin or bill is not popular, it is simply
returned through this mechanism to the Federal Reserve Banks. These
market dynamics clearly indicate that the public must recognize
the importance of using the $2 note in everyday transactions. By

demanding this note, every American can participate in reducing
government costs.

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Detailed History of each prior $2 bill released

U.S. NOTES (LEGAL TENDER ISSUE) LARGE SIZE

series Date Total Description Authority for Initiating Reason for Discontinuance
1862 No Record Alex. Hamilton Act of Congress 7/11/1862 Replaced by Series 1869
1869 14,408,000 Thom. Jefferson mM 3/3/1863 " hs "1874
1874 11,632,000 tt " " "1 '" " '! 1875
1875 11,518,000 nu . " " . '" 1878
1878 4,676,000 " _ ” " m "1880
1880 28,212,000 " " " t " " ! 1917
1917 317,416 ,000 " _ Authorized by Secretary Replaced by Small Size Currency

Treasury William G. McAdoo
TREASURY NOTES

1890
G 1891 24,904,000 James B. McPherson Act of Congress 7/14/1890 No Record Available
SILVER CERTIFICATES
1886 21,000,000 Winfield S. Act of Congress 8/4/1886 Replaced by Series 1891
Hancock :
189] 20,988,000 William Windom a we it i "1896
1896 20,652,000 Allegorical Vig. | | i a "1899
1899 958,734,000 Geo. Washington “ " No Record Available
FEDERAL RESERVE BANK NOTE (NATIONAL CURRENCY)
1918 68,116,000 Thom. Jefferson Federal Reserve Acts of 1918 No Record Available
NATIONAL BANK CURRENCY
First Char- Not Avail. Allegorical Vig. Act of Congress Replaced by Series 1875
ter Period 2/25/1863 §& 6/3/1864 |
(No Series)
" " 1,381,205 " _ No Record Available

(Series 1875)

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Series Date Total

1928 thru 430,760 ,000
1928G

1953 thru 79,920 ,000
1953C

1963 thru 18,560,000
1963A

UNITED STATES NOTES (SMALL SIZE)

Description

Authority for Initiating Reason for Discontinuance

Portrait of Thom. Secretary of Treasury-Intro- Replaced by Series 1355

Jefferson

duction of Small Size Currency

Introduction of 18 Subject as "1963
Plate

Introduction of 32 Subject Lack of demand by the !uplic
Plate

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THIS NOTE IS LEGAL TENDER
FOR ALL DEBTS, PUBLIC AND PRIVATE

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